Lifeway Foods Signs Cooperation Agreement With Danone North America PBC; Lifeway Agreed To Carry Out An Orderly Refreshment Of Its Board Of Directors, And The Pending Litigation Pertaining To Danone's Stockholders' Agreement With Lifeway Will Be Stayed

Author: Benzinga Newsdesk | September 30, 2025 04:13pm

MORTON GROVE, Ill., Sept. 30, 2025 /PRNewswire/ -- Lifeway Foods, Inc. (NASDAQ:LWAY) ("Lifeway" or "the Company"), a leading U.S. supplier of kefir and fermented probiotic products that support the microbiome, today announced a Cooperation Agreement with Danone North America PBC ("Danone"). Subject to the terms and conditions of the Cooperation Agreement, Lifeway agreed to carry out an orderly refreshment of its board of directors (the "Board"), and the pending litigation pertaining to Danone's Stockholders' Agreement with Lifeway will be stayed. Additionally, Danone has agreed not to act by written consent in favor of proposals contained in the ongoing consent solicitation filed by Edward and Ludmila Smolyansky, among others, and to support the Board's recommended director candidates at the 2025 and 2026 annual meetings.

 

As part of the Cooperation Agreement:

• Refreshment of the Lifeway Board – Lifeway agreed that, by October 30, 2025, Lifeway's Board will appoint three directors who are, and by November 14, 2025 Lifeway's Board will appoint one more director who is, independent under Nasdaq rules, selected by the Board's Strategic Review Committee (which is solely comprised of Lifeway independent directors) and unaffiliated with Danone, Ed and Lucy Smolyansky, Lifeway and any current Lifeway officer or director, subject to Danone's good faith review and approval (not unreasonably withheld, conditioned or delayed). In addition, to promote good governance practices while preserving the benefits of board continuity through an orderly board refreshment process, Pol Sikar will step down from the Board on or before the Company's 2025 annual meeting of shareholders, and Jay Scher and another current member of the Board will step down from the Board on or before the Company's 2026 annual meeting of shareholders. Pol and Jay are the longest serving members of the Board, and the Company thanks them for their service and contributions.
• Chair – Lifeway agreed that, by the earlier of October 30, 2025 and the date on which the third new independent director is appointed to the Board, the Board will separate the Chair and CEO roles, consistent with good corporate governance practices, and appoint an independent director to serve as Chair of the Board. Julie Smolyansky will continue in her role as CEO of the Company.
• Stay of Litigation – Lifeway and Danone agreed to jointly stay pending litigation.
• Stockholders' Agreement – Lifeway agreed to comply with the Stockholders' Agreement without contesting or admitting its validity, and Danone has agreed to waive certain rights under the Stockholders' Agreement, including its right to appoint a member of the Board. In addition, Danone has agreed to waive and not to enforce any of its rights under the Stockholders' Agreement (except for books and records rights), if Danone and its affiliates no longer own at least 5% of the number of shares of Lifeway common stock currently outstanding.
• No Support for Certain Future Solicitations – In the event that at any time prior to June 30, 2026, Edward or Ludmila Smolyansky call a special meeting of shareholders or commence a consent solicitation, Danone will vote or deliver a consent in accordance with the Board's recommendations with respect to all matters relating to Board composition and, with certain exceptions, Lifeway's organizational documents.
• Issuance of equity-based compensation – Lifeway's Compensation Committee will be permitted to issue equity-based compensation to members of Lifeway's management other than Julie Smolyansky and her relatives, enabling Lifeway to attract and retain talent consistent with other public companies.
• Shelf Registration Cooperation – Lifeway has agreed to file a shelf registration statement by October 30, 2025, which would facilitate the public registration of Danone's shares for sale, if Danone decides to sell shares of Lifeway common stock. Danone has agreed that, if it determines to sell its stake in Lifeway, it will consider in good faith a potential marketed offering of all or a portion of its shares of Lifeway's Common Stock.

In addition, Lifeway is in the process of evaluating capital allocation alternatives in light of these changes in order to maximize value for shareholders.

Julie Smolyansky, Lifeway's Chairman, President and Chief Executive Officer, said: "Lifeway has always been about resilience, innovation, and community. This agreement allows us to move forward with clarity and stability, while continuing to focus on what matters most: bringing probiotic-rich foods to more families and creating value for our shareholders. We are pleased to have this agreement in place as we enter this next chapter of growth."

The full Cooperation Agreement will be filed with the U.S. Securities and Exchange Commission on a Current Report on Form 8-K.

Evercore Group LLC is serving as financial advisor, and Sidley Austin LLP is serving as legal advisor, to Lifeway.

Posted In: LWAY